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Runaway CEO pay at Wall Street banks was one of the driving forces behind the financial crisis of 2008-09. Pay packages “too often rewarded the quick deal [and] the short-term gain—without proper consideration of long-term consequences,” a federal panel of inquiry concluded.

That same plot line — crazed compensation leading to recklessness and fraud — was at work in the Enron-WorldCom cycle of corporate scandals a decade earlier. And even when excessive pay at the top doesn’t lead to out-and-out disaster, a large body of research tells us that it’s generally bad for employee productivity, morale, teamwork, and loyalty.

The Dodd Frank financial reforms of 2010 included two pay-related provisions. One was specifically directed at banks, barring compensation arrangements that would encourage excessive gambling and put the public at risk. The other applied to large public corporations in general: every year, as part of their filings with the Securities and Exchange Commission, companies would have to disclose just how their CEOs’ pay compared to a typical employee’s pay.

The pay-ratio rule was among the shortest and simplest of all Dodd Frank’s requirements, but furiously resisted nonetheless. For the next seven-plus years, corporate America tried to keep the new rule from taking effect, setting teams of lobbyists and researchers to work raising all manner of implausible arguments against it. The numbers would be meaningless, confusing, and “heavily biased against businesses that rely on seasonal and part-time workers,” one big retail trade association declared. The cost of collecting the information would be “egregious,” according to the U.S. Chamber of Commerce. Corporate forces spent a ton of money bemoaning the amount of money they would supposedly have to spend.

For years, the SEC put the pay-ratio rule at the tail end of a long To Do list, as industry opponents made repeated efforts to get their friends in Congress to repeal the requirement. As recently as early 2017, a Trump-appointed acting SEC chair made noises about scuttling the rule. All the while, AFR member organizations kept pressing the case. During the official comment period, well over a hundred thousand individuals and organizations voiced support for the pay-ratio rule — a level of response that tended to discredit opponents’ claims that the data was really of no interest to shareholders or the public.

Now the early results are in, and Minnesota Congressman Keith Ellison has issued a report examining the data from the first 225 companies to comply.

Ellison’s report begins with two thought experiments: first, it asks how many typical workers a company could hire for the price of a single CEO. The answer is generally in the hundreds and often in the thousands. The $21.6 million collected by McDonald’s CEO Steve Easterbrook in 2017, for example, would have been enough to cover 3,101 median workers.

The report also frames the question in terms of how long a typical employee would have to work in order to make a single year of CEO pay. Multiple lifetimes, in most cases. At The Gap, for example, it would take 64 careers of 45 years each for a median employee to accumulate the $15.6 million bestowed on CEO Jeff Kirwan last year.

These numbers may not tell the whole story. Many companies make heavy use of third-party contractors, whose employees aren’t included in the reckoning. U.S. corporations, as Ralph Nader and Steven Clifford pointed out in a USA Today op ed, are also not required to count stock-option profits as part of executive compensation, even though those gains often exceed a CEO’s base salary,

But the data is alarming even if incomplete. The U.S. has the world’s highest CEO pay both in absolute terms and as a multiple of a typical worker’s pay, according to Bloomberg, and the pay gap has grown exponentially — from about 20 to 1 for a typical large company half a century ago, to 339 to 1 today by the Ellison staff’s count. That trend is “a dramatic indicator” of a pattern of extreme and growing inequality, driven by soaring compensation levels for the top 1 percent of US households. About two-thirds of those households are headed by corporate executives, the report says.

There has been much talk about linking CEO pay to long-term performance. The data is not especially reassuring on that count. Take the toymaker Mattel, which spent $31.3 million on CEO compensation in 2017, and came away with the most extreme pay ratio of all — 4,897 to 1. After losing more than a billion dollars last year, the company recently announced the departure of CEO Margaret Georgiadis, who had failed to halt a steep slide in sales. The value of the company fell by nearly 50 percent during her CEO-ship.

“Academics and policymakers have come up with a number of ideas that could helpcurtail skyrocketing CEO pay and make our nation more equal,” the report says. As examples, it points to Portland, Oregon, which has established a graduated tax penalty for publicly traded companies with pay gaps of 100:1 or more, and to a bill under consideration in Rhode Island, which would give preferential treatment in government contracts to companies with low CEO-to-worker pay ratios. That sort of thing could also be done at the federal level.

A more progressive income tax structure would make a big difference, of course. Throughout most of the post-World-War-Two era, top marginal tax rates in the U.S. were 70 percent or higher, “and, not surprisingly, executive compensation levels were substantially lower,” the report says. “CEOs had no incentive to demand sky-high pay, since much of it would be taxed away anyway.”

Corporate America raised an enormous ruckus about the pay-ratio provision of Dodd-Frank. Why did big companies put so much energy into fighting a mere disclosure requirement? Clearly, they feared that more public awareness would lead to more public pressure for action. Let’s prove them right. — Jim Lardner

Congress is about to make a big decision that has drawn far too little notice. The Senate plans to vote this week on a proposal to overturn a Consumer Financial Protection Bureau guidance against discriminatory auto lending.

We are talking about an industry with a long and sordid history of making nonwhite borrowers pay more than similarly situated white borrowers — often a great deal more. Against that background, a vote in favor of the Senate measure would be a vote in favor of letting auto dealers and lenders continue charging some borrowers more simply because of the color of their skin.

Car buyers who need financing most often obtain through the dealers selling them their vehicles. Unknown to most buyers, dealers typically receive backdoor rewards from lenders — kickbacks, in plain English — for getting customers to accept loans that are more expensive than their income and credit history qualifies them for. In practice, these so-called dealer mark-ups have long been a driver of racial discrimination, as well as a source of unfairness all around.

In the mid-1990s, a series of class-action lawsuits were brought against the largest auto finance companies. The data from those cases conclusively showed that African-American and Latino car buyers were more likely than white borrowers to have their interest rates marked up, often costing them thousands of dollars more than similarly situated white borrowers.

It would be nice to think such practices had been consigned to the dustbin of history. But we know better. In January, the National Fair Housing Alliance published a report in which white and nonwhite test-consumers shopped for the same car at roughly the same time. More often than not, a better qualified non-white applicant was offered higher-cost financing options than a less qualified white applicant. The added expense for these borrowers came to an average of more than $2,500 over the life of the loan.

Despite all the evidence, the federal government did little to address this widespread problem until the Consumer Financial Protection Bureau came along. In 2013, the Consumer Bureau issued a guidance warning auto dealers and lenders to follow the Equal Credit Opportunity Act, and not to discriminate in either the making or pricing of loans. The CFPB partnered with the Department of Justice in enforcement actions against Ally Financial, Honda, Fifth Third Bank, and Toyota — actions that generated more than $150 million in fines and delivered restitution to some 425,000 borrowers. In June 2015, the Bureau began to oversee the auto lending practices of nonbank financial companies, which had pretty much escaped all federal regulation.

The nation’s auto dealers have fought the bureau all the way, and since the 2016 elections their objections have carried more and more political weight. Under its Trump-installed temporary leadership, the Consumer Bureau itself has stepped back from fair-lending enforcement, as part of a broad abandonment of its consumer protection mandate. Now the dealers and their lending partners are leaning on Congress to pass a resolution that would formally repeal the 2013 guidance, and potentially curb the Bureau’s ability to take similar action in the future

The auto dealers’ and lenders’ arguments are beyond specious — they talk about keeping “auto loans affordable and accessible for all consumers,” when what they are really seeking is the freedom to generate kickbacks through practices that consistently result in borrowers of color paying more. For too many lawmakers, however, evidence and logic appear to count for nothing when they hear from a powerful and ubiquitous industry.

Ironically, these votes roughly coincide with the 50th anniversary of the Fair Housing Act, which prohibited discrimination in the financing as well as the sale and rental of residential property. Discriminatory lending in all its forms has come to be understood as an important factor in perpetuating the profound racial wealth gap that is one of our country’s great shames. It is a very sorry sign of the times that many of our elected representatives in Washington would even consider voting for such a measure.

But it is not too late for Senators to reconsider a vote that would not only countenance the continuation of one particular, deplorable form of injustice but also send a terrible message about their commitment to justice and equality across the board. It is time for Senators to look themselves in the mirror and decide if they really and truly care more about currying favor with an influential and financially generous industry than about equal rights under the law, and fairness for people of all races.

The Financial Services Roundtable (FSR) “2017 Year in Review,”—an outline of their priorities and successes—is a remarkable catalogue of attacks on families’ economic security and rights, and on financial stability, in pursuit of still higher returns for the already profitable behemoths of finance. The “year in review” is full of deeply dishonest assertions that the policies they lobby for are good for the public, when they are in fact sought by the big banks, and opposed by groups representing consumers, seniors, veterans and service members, unions and communities.

FSR members include some of the biggest Wall Street banks, asset management, and credit card companies. The group was led from 2012 to 2018 by Tim Pawlenty—a former Majority Leader of the Minnesota House of Representatives and former Governor of Minnesota. FSR recently announced plans to merge with the Clearing House Association, which is owned by the world’s largest commercial banks—e.g., Bank of America, Wells Fargo, JPMorgan Chase, Deutsche, Citibank, HSBC, among others.

Here is a look at some of their highlights:

FSR helped lead efforts to get Congress to overturn the CFPB’s rule restoring consumers rights to take financial companies to court if they break the law. They claim that by doing so they “preserve consumer access to low-cost arbitration” that it would “ensure customers … can receive larger and quicker financial compensation from disputes with companies.”

Contrary to what they claim, the CFPB rule was designed to prohibit banks and lenders that break the law from stripping customers of their right to join together and hold them accountable in class action lawsuits. By blocking consumers from challenging illegal behavior in court, forced arbitrations impose secret proceedings in which the average consumer ends up paying the bank or lender $7,725. Moreover, without the option to join together in class actions, only 25 consumers with claims under $1,000 pursue arbitration each year. In contrast, class actions returned $2.2 billion to 34 million consumers from 2008-2012, after deducting attorneys’ fees and court costs. Restricting forced arbitration is key for individual consumers to band together and confront giant financial institutions who have cheated them. Companies like Wells Fargo or Equifax should not be above the law and consumers have a right to hold them accountable.

FSR advocated for the passage of comprehensive regulatory reform bills in the House and Senate. They claim “it is important to modernize financial regulations for banks of all sizes to ensure they are appropriately calibrated and are not unnecessarily holding back lending and impeding economic growth.” Specifically, the FSR advocated for, the Financial CHOICE Act, and Rep. Luetkemeyer’s regulatory modernization bill in the House—even more radical attacks on financial regulation than Chairman Crapo’s bill in the Senate (S.2155), which the FSR also endorsed.

In reality the CHOICE Act and Rep. Luetkemeyer’s bill were radical and far-reaching measures constructed out of the legislative wish lists of the biggest Wall Street banks and the worst predatory lenders as well as debt collectors and other unscrupulous financial actors. The bills the FSR pushed for harm consumers and threaten the stability of our economy in several ways, including by: repealing the Volcker Rule, which bars banks from acting like hedge funds and gambling with taxpayer-guaranteed funds; undermining the authority and funding of the Consumer Financial Protection Bureau, which has returned nearly $12 billion to 29 million people wronged by financial institutions; and by drastically weakening the oversight authority of the Federal Reserve over large banks. The bills backed by FSR also unleash predatory lending and remove mortgage-lending rules that protect homebuyers. The bills pushed by the FSR not only deregulate based on false premises but also impose numerous barriers to regulatory action that would tie the hands of regulatory agencies if they wished to take action to protect consumers and the public interest in the future.

S. 2155, the deregulatory bill just passed by the Senate, weakens rules on dozens of large banks and undermines consumer protections in numerous ways—including, exposing home buyers to financial exploitation and predatory lending, as well as enabling racial discrimination in mortgage lending. But these changes are still only a small part of the FSR massive deregulatory agenda. If the FSR has their way, S. 2155 will only be the first step in enabling the financial sector to increase its profits in ways that exploit consumers and endanger the economy.

FSR claims that by delaying the fiduciary rule they “continued our industry leadership to ensure consumers have access to affordable finance advice that serves their best interests.”

FSR worked to delay the Department of Labor’s (DoL) conflict of interest (or “fiduciary) rule for retirement investment advice. Without the fiduciary rule there are huge loopholes in retirement savings protections that make it easy for salesmen who present themselves as “advisers” to put maximizing their own compensation ahead of the best interests of their customers. In the absence of these protections, sellers of financial products can steer customers to investment products that pay benefits to the seller at the expense of the retirement savings of working families. The Department of Labor has demonstrated that ordinary savers lose tens of billions of dollars a year due to these conflicts of interest.

FSR led efforts to override a Department of Labor rule to allow government-run and mandated IRA plans at the state and local levels. FSR claims those plans “weaken consumer protections and threaten the retirement security of millions of Americans” and “would have allowed these mandated state and local-run plans to operate outside of the protections afforded by the Employee Retirement Income Security Act (ERISA).”

FSRs efforts actually stopped the progress of programs that would have made retirement more secure for millions of workers. As explained in a joint letter to Congress signed by over 50 organizations, while the regulation in question includes an exemption from the ERISA standards, “state-sponsored programs do not get rid of [those] responsibilities, but rather shift them to the programs themselves. The regulations therefore preserve accountability and ensure consumer safety, while alleviating the burdens that keep small businesses from offering retirement benefits.” Actually, FSR applauded the repeal of regulations making it easier for state and local governments to extended retirement savings programs to some of the 55 million workers without employer-sponsored retirement plans. Until the repeal of the rule got in the way, five states (California, Oregon, Illinois, Connecticut, and Maryland) were in the process of establishing programs that would have extended retirement security to 13 million workers, mostly low- and middle-income earners and minorities–only three of those states (California, Oregon, and Illinois) have moved forward with their programs.

FSR claims to have supported “strong federal data protection and consumer breach notification legislation to help ensure consumers’ important personal and payment information is not vulnerable to cyber hackers.”

Their misleading “push” for Federal intervention on this issue is actually about “enacting a preemptive federal breach notification law … [with] language that not only preempts state breach notification laws but also prevent states from enacting any future data security or privacy laws,” as noted by Ed Mierzwinski, U.S. PIRG Consumer Program Director. FSR’s letter calls for federal regulation that seems to ignore any non-financial harms that consumers could suffer as a result of a data breach or that would not “expand the range of information protected by the law as technology develops.” Breaches cause much more than the “identity theft and financial harm” for which FSR want to provide notice. For example, it can cause emotional stress, reputational damage, and even physical harm as the personal information of domestic violence victims could be used to track them down. Enforcement of the desired regulatory framework in their letter would exempt companies complying with the Gramm-Leach-Bliley Act (GLBA), even when these companies are not required to notify breach victims ever. The GLBA exemption includes all banks and many broadly defined financial firms—including Equifax.

FSR supported the passage and enactment of the Tax Cuts and Jobs Act, claiming the tax overhaul will “drive more jobs and increase paychecks for hardworking Americans.”

This bill only further rigs the tax code in favor of profitable Wall Street banks and the wealthiest 1 percent. The so-called “increase in paychecks” in reality has translated into a one-time bonus while the firms benefit from permanent lower taxes going forward. Companies like AT&T, Comcast, and Walmart are quietly laying-off hundreds of employees while others are gearing up to buy back their own shares to pump up their value. In fact, the FSR pushed the tax bill because of its huge tax benefits to Wall Street and Wall Street executives and its massive gifts to households in the top one percent of the income distribution—who stand to accrue an amazing 83 percent of the total tax cut benefits by 2027. Instead of promoting policies that would directly benefit workers—e.g. a higher minimum wage, strengthening labor standards and worker’s bargaining power—FSR’s President favors a “trickledown” approach to wage growth, ignoring that the almost forty-year-long trend of wage stagnation for middle- and low-wage workers refutes such approach.

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FSR’s 2017 yearly review lays out ‘progress’ on the wish list of some of the worst actors in the financial system, many of which are directly responsible for the last financial crisis and economic recession and have a history of cheating their own employees and defrauding consumers—e.g., JPMorgan, Bank of America, Citi, Wells Fargo, Santander, First Republic. Their 2017 highlights are a direct attack on consumer protections and the financial stability of our country.

In April 2017, the Consumer Financial Protection Bureau sued four companies, Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial, for using sham tribal-sovereignty claims to collect debts on loans that violated an array of state laws as well as the federal Truth in Lending Act.

On January 18, 2018, the bureau moved to dismiss its lawsuit. After an initial statement attributing the decision to “professional career staff,” Mick Mulvaney backtracked, acknowledging his own involvement. The case took years to build, and the idea of dropping it was opposed by the “entire career enforcement staff,” National Public Radio has reported.

Here is what we know about the companies, their operations, and the allegations against them.

Golden Valley payment schedule on an $800 loan

The four companies used their websites and online ads to make tens of millions of dollars of loans at 440% – 950% annual interest. Between August and December 2013, Silver Cloud and Golden Valley originated roughly $27 million in loans and collected $44 million from consumers. A typical $800 loan called for payments totaling approximately $3,320 over ten months — the equivalent of 875.5% annual interest. Interest rates on all the loans examined by the CFPB ranged from 440% to 950%.

The Consumer Bureau sued them for engaging in unfair, deceptive, and abusive business practices by attempting to collect payments on loans that were void in whole or part under the usury and/or licensing laws of 17 states. Their loans were illegal, according to the complaint, in Arizona, Arkansas, Colorado, Connecticut, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, South Dakota, and Ohio. Golden Valley and the other companies carried on with their lending and collection activities even after the Attorneys General of several states sent cease-and-desist letters.

The defendants explained their fees in confusing ways, according to the complaint, and violated the federal Truth in Lending Act by failing to disclose annual interest-rate information on their websites or in their advertising. “Each of Defendants’ websites advertises the cost of installment loans and includes a rate of finance charge but does not disclose the annual percentage rates (APR). The ‘FAQ’ section of each of the websites answers the question ‘How much does the consumer loan cost?’ by stating: ‘Our service fee is $30 per $100 loaned. This fee is charged every two weeks on your due dates, based upon the principal amount outstanding.’”

The companies were charged with violating a Truth in Lending Act requirement that all advertising for closed-end credit state finance charges in annual percentage rate terms. In addition, according to the complaint, customer service representatives consistently failed to include that information in answers to questions raised over the phone by applicants or customers.

The four companies claimed to be protected by tribal sovereign immunity. Based on ties to a small Native American tribe in Northern California, they asserted that their loans would be “governed by applicable tribal law” regardless of where the consumer “may be situated or access this site.” The companies made this claim despite a United States Supreme Court ruling in 2014 that tribes “‘going beyond reservation boundaries’ are subject to any applicable state law.’” Numerous courts have held that when a loan is made online, the transaction is considered to have taken place wherever the consumer is located at the time.

Despite recent legal victories, states can have a hard time, without federal help, going after online lenders that break state laws. Through the use of shell companies, “lead generators,” and various legal ploys, online lenders — including the companies named in this lawsuit — have been able to keep state authorities at bay for years. Whether tribal ties really give payday loan companies a right to assert sovereign immunity remains a murky legal issue: the courts have allowed some state lawsuits to proceed while blocking others. But tribal businesses cannot invoke sovereign immunity against the United States. That’s one reason why the federal government’s ability to act is so important.

Revenues from at least one of the four lenders, and from an affiliated call center, went to RM Partners, a corporation founded by the son of Richard Moseley, Sr., who was recently convicted of federal racketeering charges. Moseley Sr., a Kansas City businessman, was found guilty in November 2017 of wire fraud, aggravated identity theft, and violations of the Truth in Lending Act as well as racketeering in connection with a payday lending scheme that charged illegally high interest rates and issued loans to people who had not authorized them. Over an eight-year period, according to the Justice Department, Moseley’s operation took advantage of more than 600,000 customers and generated an estimated $161 million in revenues. Moseley and his son spent some of that money on “luxuries including a vacation home in Colorado and Playa Del Carmen, Mexico, high-end automobiles, and country club membership dues.”

The business practices of Moseley’s operation and the four defendant companies closely resembled those of another Kansas payday lender, the race-car driver Scott Tucker, also recently convicted of federal racketeering charges. Like Golden Valley et al, the lending companies run by Tucker and his lawyer-partner Timothy Muir did business through a call center located in Overland Park, Kansas, and relied on a claim of tribal sovereign immunity, based in their case on ties to an Oklahoma tribe. The Tucker-Muir companies, featured in the Netflix documentary series “Dirty Money,” used similar contractual language to obscure their practice of defaulting customers into a many-months-long series of payments that got applied entirely to loan fees, making no dent in the balance.

Tucker and Muir were convicted in January 2018 of racketeering, wire fraud, money laundering, and violations of the Truth-In-Lending Act. Payments collected by Tucker’s businesses went into accounts at U.S. Bank, whose parent company, U.S. Bancorp, has agreed to pay $613 million in civil and criminal penalties for what the Justice Department described as a “highly inadequate” anti-money-laundering system that failed to flag these and other suspicious transactions. The Tucker-and-Muir story is another illustration of the need for action at the federal level if online payday lenders are to be stopped from evading state laws and continuing to exploit consumers.

Predatory payday lenders do not like to be told how they can and can’t abuse consumers, and they fight protections every step of the way.

Months before the Consumer Financial Protection Bureau proposed a new rule in 2016 that threatens the profits of avaricious payday lenders across America, the industry’s leaders gathered at a posh resort in the Atlantis in the Bahamas to prepare for battle. One of the strategies they came up with was to send hundreds of thousands of comments supporting the industry to the consumer bureau’s website. But most of their comments, unlike those from the industry’s critics, would be fake. Made up.

Payday lenders recruited ghostwriters

They hired a team of three full-time writers to craft their own comments opposing the regulation. The result was over 200,000 comments on the consumer bureau’s website with personal testimonials about payday lending that seemed unique and not identical, supporting the payday lending industry. But if you dig a little deeper, you would find that many of them are not real.

Late last year, the Wall Street Journal and Quid Inc., a San Francisco firm that specializes in analyzing large collections of text, dug deeply. They examined the consumer bureau comments and found the exact same sentences with about 100 characters appeared more than 200 times across 200,000 comments. “I sometimes wondered how I would be able to pay for my high power bill, especially in the hot summer and cold winters” was a sentence found embedded in 492 comments. There were more: “Payday loans have helped me on multiple occasions when I couldn’t make an insurance payment,” and “This is my only good option for borrowing money, so I hope these rules don’t happen,” appeared 74 times and 295 times, respectively.

At the same time, the Journal conducted 120 email surveys of posting comments to the CFPB site. Four out of ten supposed letter-writers claimed they never sent the comment associated with them to the consumer bureau website. One lender told the Journal, for example, that despite a comment clearly made out in her name discussing the need for a payday loan to fix a car tire, she actually doesn’t pay for car issues since her family owns an auto shop. Consumer advocates had previously suggested something fishy was going on, and were vindicated by the report.

Another WSJ investigation has identified and analyzed thousands of fraudulent posts on other government websites such as Federal Communications Commission, Securities and Exchange Commission, Federal Energy Regulatory Commission, about issues like net neutrality rules, sale of the Chicago Stock Exchange, etc.

Payday lenders also forced borrowers to participate in their campaign

They had previously used this tactic to organize a letter-writing campaign in an attempt to influence local lawmakers, with forced signatures. The campaign collected signatures from borrowers to support legislations that would legalize predatory loans with triple-digit interest rates in the states. According to State Representative of Arizona Debbie McCune Davis, borrowers were forced to sign the letter as part of their loan application. Some did not even recall they signed the letters.

Fast forward back to the consumer bureau’s proposed payday lending rule, and some trade association websites were used to spread comments praising the industry with borrowers’ names who actually had nothing to do with it. Carla Morrison of Rhodes, Iowa, said she got a $323 payday loan and ended up owning more than $8,000 through a payday lender. “I most definitely think they should be regulated,” Morrison said, after she knew payday lenders used her name to fraudulently praise the industry. The truth is, Morrison’s comment originated from a trade association website, IssueHound and TelltheCFPB.com, which the payday-lending trade group, Community Financial Services Association of America, used to forwarded comments on payday-lending rule, with no clue these comments were fake. “I’m very disappointed, and it is not at all the outcome we expected,” said Dennis Shaul, the trade group’s CEO.

Payday lenders even tricked their own employees

In Clovis, Calif Payday lender California Check Cashing Stores asked its employees to fill out an online survey after too few customers did. In the survey, Ashley Marie Mireles, one of the employees said she received a payday loan for “car bills” to pay for patching a tire. The truth was she never paid the bill because her family owns an auto shop where she doesn’t have to pay.

Fake names, ghostwriters, and forced signatures. Payday-lenders financed a process of driving fraudulent material to stop regulation curbing the industry’s abuses. It wasn’t enough that they’re running an industry based on the immoral notion of trapping borrowers into a cycle of debt where they cannot escape, targeting the most financially vulnerable communities. Apparently, these voracious payday lenders will do anything to fight protections for consumers.

The consumer bureau has since issued a final rule this past October, with protections for borrowers going into effect in 2019.

On January 31, a federal appellate court upheld the constitutionality of the Consumer Financial Protection Bureau (CFPB) as an independent regulatory agency with a director who can be dismissed only for “inefficiency, neglect of duty, or malfeasance in office.” That structure — spelled out in the Dodd-Frank financial reform law of 2010 — had been challenged by a New Jersey mortgage lender in a lawsuit contesting a CFPB enforcement action over kickbacks and inflated fees. The D.C. Court of Appeals rejected PHH’s argument.“Congress’s decision to provide the CFPB Director a degree of insulation reflects its permissible judgment that civil regulation of consumer financial protection should be kept one step removed from political winds and presidential will,” the court ruled. “We have no warrant here to invalidate such a time-tested course. No relevant consideration gives us reason to doubt the constitutionality of the independent CFPB’s single-member structure.”

Here are some key points made in the majority opinion by Judge Cornelia Pillard:

Congress had sound reasons for deciding on a single director rather than a commission, and for shielding the CFPB director against dismissal without cause. “Congress designed an agency with a single Director, rather than a multi-member body, to imbue the agency with the requisite initiative and decisiveness to do the job of monitoring and restraining abusive or excessively risky practices in the fast-changing world of consumer finance… A single Director would also help the new agency become operational promptly, as it might have taken many years to confirm a full quorum of a multi-member body.”

“By providing the Director with a fixed term and for-cause protection, Congress sought to promote stability and confidence in the country’s financial system.”

There are many legal precedents for this kind of protection.

The [Supreme] Court has held, time and again, that while the Constitution broadly vests executive power in the President, U.S. Const. art. II, § 1, cl. 1, that does not require that the President have at-will authority to fire every officer.”

The “removal restriction” established for the CFPB “is wholly ordinary.” The language of the statute is identical to that of a law “approved by the Supreme Court back in 1935 in Humphrey’s Executor and reaffirmed ever since.”There is nothing in the Constitution or case law to suggest that an independent agency needs a “multi-headed structure” for the sake of accountability.

That argument “finds no footing in precedent, historical practice, constitutional principle, or the logic of presidential removal power.”

The CFPB is not uniquely powerful or free of restraint.

“Today’s independent agencies are diverse in structure and function…. [T]he CFPB’s power and influence are not out of the ordinary for a financial regulator or, indeed, any type of independent administrative agency.”

A single director is in some respects easier to hold accountable.

“Decisional responsibility is clear now that there is one, publicly identifiable face of the CFPB who stands to account—to the President, the Congress, and the people— for all its consumer protection actions. The fact that the Director stands alone atop the agency means he cannot avoid scrutiny through finger-pointing, buck-passing, or sheer anonymity. “

Effective mechanisms exist for holding the CFPB accountable. Its actions are subject to veto by the Financial Stability Oversight Council and to review by the courts.

The Second Circuit has itself affirmed a lower court’s decision to overturn a $109 million penalty imposed on PHH, agreeing that the CFPB misinterpreted the law. “The now-reinstated panel holding that invalidated the disgorgement penalties levied against PHH… illustrates how courts appropriately guard the liberty of regulated parties when agencies overstep.”

The budgetary autonomy given to the CFPB is also not unique.

“Congress has provided similar independence to other financial regulators, like the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Federal Housing Finance Agency, which all have complete, uncapped budgetary autonomy.”

There is a long tradition of taking extra measures to ensure the independence of financial oversight agencies.

“[T]he CFPB Director’s autonomy is consistent with a longstanding tradition of independence for financial regulators, and squarely supported by established precedent. The CFPB’s budgetary independence, too, is traditional among financial regulators, including in combination with typical removal constraints. PHH’s constitutional challenge flies in the face of the Supreme Court’s removal-power cases, and calls into question the structure of a host of independent agencies that make up the fabric of the administrative state.”

“That independence shields the nation’s economy from manipulation or self-dealing by political incumbents and enables [independent] agencies to pursue the general public interest in the nation’s longer-term economic stability and success, even where doing so might require action that is politically unpopular in the short term.”

The CFPB’s structure poses no threat to normal presidential authority over “core executive” functions. But if the courts accepted PHH’s arguments against the CFPB, the whole idea of independent regulatory agencies would be threatened.

“The threat PHH’s challenge poses to the established validity of other independent agencies, meanwhile, is very real. PHH seeks no mere course correction; its theory, uncabined by any principled distinction between this case and Supreme Court precedent sustaining independent agencies, leads much further afield. Ultimately, PHH makes no secret of its wholesale attack on independent agencies—whether collectively or individually led—that, if accepted, would broadly transform modern government.”

“The President’s plenary authority over his cabinet and most executive agencies isobvious and remains untouched by our decision. It is PHH’s unmoored theory of liberty that threatens to lead down a dangerously slippery slope.”

U.S. Senator Jeff Merkley yesterday warned that Mick Mulvaney’s actions as the unlawful acting head of the Consumer Financial Protection Bureau is destroying the bureau’s ability to stop predatory lending – the infamous “debt trap.”

“The CFPB has become the ‘Corporate Financial Protection Bureau’ under Mick Mulvaney as it abandons efforts to stop the debt trap,” Merkley said in a call with reporters.

Merkley spoke on a call organized by the Center for Responsible Lending and Americans for Financial Reform. Merkley was joined by Rev. Willie Gable Jr., head pastor at the Progressive Baptist Church in New Orleans, Yana Miles, senior legislative counsel at the Center for Responsible Lending, and Jose Alcoff, from the Stop The Debt Trap campaign.

Long before Mulvaney joined the White House as the director of the Office of Management and Budget, he was a shill for payday loan sharks, an industry that has fought the consumer bureau tooth and nail since the agency started, and is now trying to cash in on the Trump administration. Mulvaney took $63,000 from them over the course of his election campaigns.

Hacking away the consumer bureau’s efforts to stop payday lending is only one of the ways Mulvaney has harmed consumers during the 75 days since President Trump installed him as the bureau’s acting head. “His continued effort to undermine the integrity of the consumer bureau will have lasting and damaging effects on working families across the country,” Miles said.

Merkley said that Mulvaney is “blatantly trying to dismantle the bureau from the inside,” and called on supporters of the bureau to fight back.

“If this isn’t a crystal-clear example of the Trump administration governing of, by, and for the powerful rather than of, by, and for the people, then I don’t know what is,” Merkley said. “This is exactly the opposite of what Trump promised during his election campaign. He is standing up for predatory Wall Street practices, instead of standing up for our working Americans. We need to change that.”

A majority of Americans, including coalition of congregations, civil rights groups, unions, consumer advocates, and others, would like to see consumer bureau’s work continue, according to a poll released by AFR and CRL. Mulvaney needs to let the consumer bureau do the excellent job it did under the previous director. “Trump needs to nominate a director with a track record of protecting consumers, one who can earn bipartisan support in the Senate,” Alcoff said.

After the U.S. government bailed out the banks in 2008, they bounced back quickly even as ordinary Americans lost their homes and jobs.

In the last year, banks have seen record profits; we have learned about a series of outrageous and widespread customer abuses by Wells Fargo; and millions of Americans had their personal data exposed to hackers because of a security breach at credit bureau Equifax.

Does that sound like a moment when senators need to rush to action on measures sought by the bank lobby that will harm consumers and endanger financial stability? Unfortunately, a bipartisan group of senators — nine Republicans and 10 Democrats — seems to think so.

They’re marking up a bill that, under the fig leaf of some token gestures toward consumer protection, would deliver early holiday gifts to banks large and small.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155) would sharply cut back the post-crisis mandate that regulators provide enhanced oversight to a set of very large banks. In fact, the bill removes that mandate for 25 of the 38 largest banks.

Together, these banks account for over $3.5 trillion in banking assets, more than one-sixth of the U.S. total. They got about $47 billion in bailout funds during the crisis. Yet, this legislation would give the green light to Trump regulators to ease off on regulation, inviting a return to the pre-financial crisis world where regulators dropped the ball on bank oversight.

That’s not the only way this legislation weakens post-crisis reforms. It would strip away multiple mortgage-lending protections, especially for buyers of manufactured homes (aka mobile homes), who are likely to face higher costs.

It would limit consumer protections for customers of banks with less than $10 billion in assets, including loan disclosures, anti-foreclosure safeguards and other protections against shady lending.

It would create a new loophole in the Volcker Rule that would open the door for small and medium-sized banks to engage in reckless, speculative trading with customer deposits.

Against all these sugar plums for industry, S.2155 includes only minor benefits for consumers, such as one free freezing and unfreezing of their credit per year. The small number of very limited consumer measures don’t even begin to counterbalance the impacts of bank deregulation. How about a focus on the pressing economic needs of individuals and communities instead?

Supporters of S.2155 argue that it’s acceptable because it doesn’t include some of the biggest items on Wall Street’s wish list. We are glad that increased public attention to the impact of banking rules on all of our financial security is creating some constraints on giveaways. But whether or not Wall Street gets everything it wants in this bill is not the right standard.

Banks are not suffering — quite the contrary. There is no evidence that financial regulation is harming the workings of the economy for most people. The latest data from the Federal Deposit Insurance Corporation — for the third quarter of this year — showed a 5-percent increase in profits over the same period last year.

Community banks recorded a 9-percent increase. Those increases are after banks showed record-setting revenues last year. Over 95 percent of community banks turned a profit in 2016, up from 78 percent in 2010, the year the Dodd-Frank Act was passed.

Ordinary American families saw no such increase in their earnings this year. But they’re taking one on the chin at the other end of Pennsylvania Ave. as the Trump administration attempts to hamstring the Consumer Financial Protection Bureau by trying to install someone as director who has said it should not exist.

The work they are trying to disrupt? This agency, only 6 years old, has won $12 billion in relief for over 29 million American consumers.

These attacks are all the more reason for Congress to be focused on the public interest and consumer protection.

With the Trump administration appointing industry-friendly regulators, supporting this bill sends the message that members of Congress want to join the push in that direction and that even though banks are doing fine, policymakers should put their demands ahead of the stability of the financial system and the welfare of the public.

There is still time to stop this bill. There has been no hearing on the legislation, and as issues are brought to light in the markup, Senators should remove themselves as co-sponsors. Senators should not allow it to be jammed though as an attachment to must-pass legislation.

At a bare minimum, the public deserves an open debate on the Senate floor.

The job of the U.S. Senate is to legislate on behalf of the American people as a whole. Senators should be choosing to fight for tougher rules to hold big banks accountable, for better protections of consumer data and for relief for student-loan borrowers, instead of prioritizing the interests of finance over those of ordinary Americans.

Lisa Donner is the executive director of Americans for Financial Reform, a progressive organization that advocates for financial reform in the United States, including stricter regulation of Wall Street.

When a financial flim-flammer scatters to the wind or goes bankrupt, its victims are typically out of luck. But when the Consumer Financial Protection Bureau is on the case, the story can have a better ending.

Just in the past three months, the CFPB has sent over $100 million to an estimated 60,000 victims of a sham debt-relief company, Morgan Drexen, that went bust after collecting up-front fees for services it mostly never delivered.

The CFPB’s ability to bring a measure of justice to Morgan Drexen’s defrauded customers rested on authority granted by Congress. It works like this: When a solvent company is caught breaking the law, the bureau orders that company — Wells Fargo, let’s say — to make restitution to its victims. But that is only part of the remedy. The Dodd Frank Act, which set up the CFPB, gives it the additional power to levy a civil penalty — both to discourage further wrongdoing by the company involved, and as a warning to others. That money goes into a fund that the CFPB can use to deliver relief to those ripped off by malefactors who are no longer in a position to pony up.

By this means, the CFPB has delivered nearly $500 million in relief to hundreds of thousands of people, including the victims of scammers who, among other things:

No big surprise, perhaps, from an anti-consumer ideologue who has called the CFPB a “sick, sad joke,” and, as a congressman, voted again and again for measures to curb its authority, funding, and political independence.

The victims of the Morgan Drexen scam were particularly lucky to have the CFPB on their side. Down to their last dollars in many cases, they had turned to the firm to reduce their debt burden, only to get swindled. Restitution came as a happy surprise to most of them. One grateful Florida man received a check for $1550. A real helping hand for real people. — Jim Lardner

More eyes than ever will be on the Consumer Financial Protection Bureau, now that a federal judge has refused to immediately block the Trump Administration’s effort to install OMB director Mick Mulvaney as acting director. One thing to watch will be the fate of a planned lawsuit against the U.S. arm of the Spanish megabank Santander.

The agency was reportedly on the brink of filing such an action last week. Its lawsuit, according to Reuters, would accuse Santander of overcharging customers on auto loans through the aggressive marketing of an often unneeded add-on product known as “Guaranteed Auto Protection” or GAP insurance.

Santander has a long rap sheet. Over the past few years, the bank has been investigated for a variety of offenses by a variety of agencies, with corroborating testimony from its own employees in a few cases.

In 2015 the CFPB hit Santander with a $10 million fine for deceptively marketing so-called overdraft “protection” and signing up customers without their consent. (Santander blamed the problems on a contract telemarketer.) Also that year, the company agreed to pay more than $9 million to settle a Justice Department lawsuit over the illegal repossession of cars belonging to members of the military. In another troubling story, Santander call-center workers complained about being pressured into predatory lending and debt-collection practices and not being given the time or support to treat customers fairly.

What will happen with the auto-loan case? Here are a few grounds for concern.

Mulvaney, in his congressional days, belonged to a bloc of lawmakers known for taking the financial industry’s campaign money (more than a quarter of a million dollars over four successful House campaigns) and parroting its talking points. He has described the Consumer Bureau as a sick joke and backed legislation to abolish it. A longtime Mulvaney aide, Natalee Binkholder, recently went to work for Santander as a lobbyist. In that capacity, she was deeply involved in Wall Street’s successful effort to get Congress to oveturn a CFPB rule guaranteeing the right of consumers to band together and take banks to court over accusations of systematic illegality.

By the time Mulvaney made his first appearance at the bureau Monday morning, an acting director, Leandra English, was already in place. The White House, in announcing Mulvaney’s appointment, cited a quickie legal ruling from the Justice Department in favor of the President’s right to name someone — despite language to the contrary in the Dodd-Frank Act, which set up the agency. (The DOJ opinion, we now learn, was written by an assistant attorney general who just a year ago represented an offshore payday lender facing a CFPB lawsuit.)

The CFPB was the first federal financial regulator with a mandate to put the interests of consumers ahead of the power and profitability of banks. In its short life, the agency has delivered $12 billion in financial relief to more than 29 million wronged consumers. It has stood up for the victims of for-profit colleges, defended veterans and servicemembers against financial scams, gone to bat for the victims of fraudulent for-profit colleges, and made Wells Fargo pay $100 million in penalties for opening millions of bogus accounts.

The immediate question is about the Bureau’s leadership. The bigger question is whether this vitally important agency will be allowed to go on doing its job.

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This blog is maintained by AFR as a forum for ongoing news and commentary about the fight for effective financial reform. Blog posts represent the opinions of their authors / posters, and do not necessarily represent the views of the AFR coalition or coalition members.